Are Shareholding Directors Counted as Employees Under the ESI Act? Seeking Clarity

Dear All,

As per the ESI Act, establishments with 10 or more employees will be covered under ESI. My question is whether the Directors are to be considered for the calculation of the number of employees? Please note that in our company, we have 3 Directors who are shareholders and also receive Director's remuneration but do not have any Managing Directors as such.

NB: I know that Managing Directors are generally covered, but I have doubts about whether the same applies to shareholding Directors. Please guide.

Regards,
DG

Directors as Employees for ESI and EPF Coverage

Salaried and executive directors will be counted as employees for the purpose of coverage of ESI and also EPF. At the same time, directors who receive fees will not be counted as employees.

Regards,
Madhu.T.K